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Experian reported organic revenue growth of 7% in the third quarter, with total revenue including acquisitions of 9% (both at constant exchange rates). Growth was driven by Latin and North America, with markets outside the Americas contracting on both an organic and reported basis.

Nonetheless, the performance is in line with expectations, and full year guidance remains unchanged.

Our View

Credit checks are still Experian's bread and butter. But with big data playing an increasingly important role in all walks of life, the group's putting its formidable expertise to work in other areas too.

Business-to-business (B2B) sales are growing nicely, helped by expansion into new geographies and new markets like healthcare and automotive. Latin America has been a particular success, accounting for around 16% of profits last year despite economic and political turmoil in Brazil, the region's biggest market.

However, it's not all been plain sailing. A few years ago rivals began offering free consumer credit checks in the US and UK, undermining Experian's subscription service and blowing a massive hole in the higher margin consumer business.

Experian has responded with its own free product, cross-selling advanced credit products and price comparison services. The recent US launch of 'Experian Boost', where consumers supply additional non-standard data like mobile phone and utility contracts to boost their credit ratings, has been something of a masterstroke. Not only have CreditMatch sales improved substantially, but it also provides Experian with a unique and wholly new dataset for its business-to-business division.

With both the US and UK Consumer businesses back in growth, albeit from a far lower level, investors can return their focus to the secular growth in the B2B business.

Given the large quantities of sensitive personal data Experian holds, perhaps our biggest concern is the group's exposure to cybercrime. Rival Equifax has already been caught out, and higher regulatory costs would be far from ideal. There are also some questions about the group's exposure to the economic cycle, given the poor performance of the UK in the run up to the general election.

Nonetheless, we believe Experian is a high-quality business with a bright future. Big data is an increasingly important part of an ever-growing number of industries, and Experian's steady growth is testament to its willingness to innovate and enter new markets.

Unfortunately that potential comes at a price, a price to earnings ratio of 30 times is well above the long run average. That adds a degree of short term risk, because anything other than perfect delivery risks a de-rating and painful share price fall, and means the shares offer a prospective yield of just 1.5%.

Third Quarter Trading Update (All at constant exchange rates)

North American sales grew 11%, or 10% on an organic basis. That reflects strong growth in B2B (+11%), thanks to a good result from data platform Ascend while the newer fraud and identity management and health businesses also performed well. Consumer Services grew 7%, with Experian Boost now having attracted 2.4m US customers.

Latin American sales rose 19%, or 18% on an organic basis, with particularly strong growth in Brazil. The performance of the consumer offer was particularly notable, and the group now has 42m free consumer memberships in Brazil.

Revenues fell 3% in the UK & Ireland on both an organic and reported basis. B2B sales fell 4%, reflecting a 12% decline in Decisioning revenue as clients delayed investment decisions. The Data and Consumer businesses both delivered revenue growth of 1%.

EMEA/Asia Pacific saw sales fall 1%, or 13% on an organic basis, with the difference accounted for by recent acquisitions. Decisioning was again the weak spot, reflecting the timing of some contracts and a strong year last year.

Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.

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